Do You Have Time for a Short Survey?

When businesses want to gather information about customer service issues, they ask people to take a short survey. The information is used to refine procedures to better meet customer needs. The IRS conducts “short surveys” also, but the flavor is much different. First, they don’t ask if you have time. They just declare that you’ve been “selected at random for a compliance research examination.” They audit you, not to see if your return is correct, but to “better understand tax compliance.” And rather than taking a few minutes to score performance, you get a two-page list of questions and demands for documents. You then have the privilege of investing dozens of hours organizing and copying records, and providing explanations, purportedly to “improve the fairness of the tax system.” In fact, these “research audits” are used to update the database responsible for selecting the vast majority of returns targeted for face-to-face audit. The problem is this does not make the system fairer, chiefly because audit results are wrong 60-90% of the time. As the IRS rolls out these “research” audits, be prepared to challenge incorrect decisions or pay taxes you don’t owe. See: How to Win Your Tax Audit.